Unlocking Value

China Merchants China Direct Investments (CMCDI, 133 HK) will hold its Annual General Meeting (AGM) on 28 May 2025.

The AGM resolutions are routine and uncontroversial, except one: the re-election of Mr. Tsang Wah Kwong (曾華光) as an independent non-executive director (INED). Mr. Tsang is also the chairman of CMCDI’s audit committee and a nomination committee member.

We, Argyle Street Management, will vote AGAINST Mr. Tsang.

CMCDI classifies Mr. Tsang as an INED, even though he has been an INED for 13 years. If re-elected, he will serve another three years, so his tenure will have been 16 years. That is way too long.

The Hong Kong Stock Exchange has been examining exceedingly long INED tenures as part of a wider review of Hong Kong corporate governance practices. It says:

The Exchange will not consider a person to be independent if he or she has been an INED of an issuer for a period of nine years or more... We propose a new Listing Rule to provide for a hard cap of nine years on the tenure of INEDs.

Both Institutional Shareholder Services (ISS) and Glass Lewis, the two biggest proxy advisors, say that exceedingly long tenures are problematic.

Glass Lewis does not consider Mr. Tsang independent, because its benchmark policy guidelines says:

After 12 years of service, we will not consider a director to be independent.

ISS’s benchmark policy guidelines says:

Directors with a tenure exceeding nine years will be considered non-independent unless the company provides sufficient and clear justification that the director is independent despite his long tenure.

So what “sufficient and clear justification” does CMCDI give? This is all CMCDI has to say:

“Mr. TSANG has expressed objective views and given independent guidance to the [CMCDI] over the years, and he will continue demonstrating a firm commitment to his role. The Board considers that the long service of Mr. TSANG would not affect his exercise of independent judgment and is satisfied that Mr. TSANG has the required character, integrity and experience.”

In order words, CMCDI merely copied-and-pasted the same paragraph 2022 AGM circular, when Mr. Tsang tried to get re-elected.

With Mr. Tsang himself on CMCDI’s nomination committee, CMCDI’s unsatisfactory explanation makes it seem Mr. Tsang’s nomination as an INED was rubber-stamped without seriously considering whether his long tenure jeopardises his independence.

Mr. Tsang’s independence matters.  He is the chairman of the audit committee.  The valuation of CMCDI’s assets, especially the hard-to-value non-listed assets, depends on him. 

We have been proposing detailed disclosures of the methods and assumptions used in valuing these assets. As an INED who is obliged to safeguard the interest of independent shareholders, Mr. Tsang has, disappointingly, not even responded on the issue.

Please exercise your own judgement when you vote.

Contact us:

💬 WeChat: ASM_Argyle

💬 WhatsApp: +852 6317 6371

🖥️ UnlockValueChinaMerchants.com

📧 ChinaMerchants@asmhk.com

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招商局中国基金（招商局基金, 133 HK）将于2025年5月28日召开年度股东大会（AGM）。

本次股东大会的决议大多为常规且无争议事项，但有一项例外：曾华光先生（Tsang Wah Kwong）作为独立非执行董事（INED）的连任提议。曾先生同时担任招商局基金审计委员会主席及提名委员会成员。

我们Argyle Street Management将投票反对曾先生的连任。

招商局中国基金将曾先生归类为独立非执行董事，但事实上他已担任该职务长达13年。如果再次连任，他将继续服务3年，总任期将达到16年。这一任期过于长久。

香港联交所正在研究独立非执行董事过长任期的问题，这是其对香港公司治理实践进行更广泛审查的一部分。联交所表示：

如果某人担任某发行人的独立非执行董事职位已超过九年，将不再被视为独立人士……我们建议新增上市规则，对独立非执行董事任期设置九年的硬性上限。

全球最大的两家代理顾问公司——Institutional Shareholder Services (ISS) 和 Glass Lewis——均认为过长的任期是有问题的。

Glass Lewis 不认为曾先生是独立的，因为根据其投票指南：

在任期超过12年后，我们将不再认为董事是独立的。

ISS 的投票指南指出：

任期超过九年的董事将被视为非独立，除非公司提供充分且明确的理由证明该董事尽管任期长仍然是独立的。

招商局基金提供了什么“充分且明确的理由”呢？以下是招商局基金的全部解释：

作為一個對[招商局基金]經營和業務有深入了解的獨立非執行董事，過去多年來曾先生對[招商局基金]表達其客觀的觀點及給予獨立的指導，而他將繼續表現出其盡忠職守的承諾。董事會認為，曾先生長期的服務不會影響其行使獨立的判斷，並確信曾先生具有所必備的個性、誠信及經驗，以繼續履行其獨立非執行董事之職責。

换句话说，招商局基金一字不漏地抄了2022年（當年也是要重選曾先生）股东大会通函中的相同段落。

在曾先生本人也是提名委员会成员的情况下，招商局基金的解释令人不满，让人觉得曾先生作为独立非执行董事的提名只是敷衍小股東，未认真考虑其长任期是否影响独立性。

曾先生的独立性至关重要。他是审计委员会主席，招商局基金资产的估值，尤其是难以估值的非上市资产，取决于他的判断。

我们一直建议对这些资产估值中使用的方法和假设进行详细披露。然而，作为有义务保障独立股东利益的独立非执行董事，曾先生從未回應这一问题。這令人常失望。

请自行独立判断如何投票。

联系我们：

💬 微信：ASM_Argyle

💬 WhatsApp：+852 6317 6371

🖥️ 网站：UnlockValueChinaMerchants.com

📧 邮箱：ChinaMerchants@asmhk.com